Can Theresa May do a Robert Peel? The tension on Brexit mounts.

I like to tout my record in predicting the direction Brexit takes. My current prediction is that Britain will leave on 29 March 2019, with a deal of some sort in place, and the prospect of a relationship with the EU something like the one Turkey has: a customs union for agriculture and goods, but not services, and no guaranteed freedom of movement. I was reasonably secure in this idea after the Chequers summit a couple of weeks ago, but the politics since has become ugly. The chances of an accidental catastrophe are rising..

The main issue at the moment is whether or not Britain is able to secure a deal that will allow an orderly exit. This will not of itself determine what the UK's longer term relationship with the EU will be (something not properly undestood by most commentators). But it will usher in a transitional period up to December 2020, during which time these details can be thrashed out. The main problem with this is the future relationship between the north and south of Ireland. The EU insists that there is no hard border between the two, and that this means some form of regulatory alignment. That either means alignment between the EU and the UK as a whole, or that Northern Ireland has a separate legal status of being half-in and half-out of the EU, and that there would be a border of some sort between it and the rest of the UK, as there is with the Isle of Man, I suppose (except that the Isle of Man is completely outside the EU). These alternatives are currently embedded into the current draft of the agreement between the EU and the UK. It looks impossible to get an agreement with the that sort of internal UK border though parliament. Besides this is a critical issue to the Democratic Unionists (the DUP) on whom the Conservative government depends for a working majority.

This brings us to the Chequers proposal - the set of principles, now in a White Paper, agreed by the Cabinet. The main intention of this is to take the threat of a border between NI and the rest of the UK out of the final agreement. This is classic "kicking the can down the road", to use the favoured cliché. People sneer at this sort of can-kicking, but it is usually the only way that big and complex deals like this can be progressed. The question now is twofold: can the British government persuade the EU to accept the fudge and to drop the intra-UK border idea, without making too many further concessions on freedom of movement, etc? And can the government get any such deal through the UK parliament? The former can't be taken for granted, but my main concern for now is the latter.

Things are looking harder than I thought. In my last post I said that the Prime Minister Theresa May had successfully faced down the closet Remainers in her party, and that she now had to face down the Brexit hardliners. In the event, after the Chequers summit, she managed only a partial victory. She has won over some powerful Brexit supporters to her compromise formula, notably Michael Gove and Dominic Raab. But there have been a number of resignations. The two cabinet ministers, David Davis and Boris Johnson, don't look to be that great a loss. They were both under-performers who would not put the work into their portfolios; Mr Johnson was actively disloyal. But there have been more competent people leaving at more junior levels, and these are coalescing around the leader of the hardline Brexit faction, Jacob Rees-Mogg, who is putting up vociferous and effective opposition, supported by much of Britain's press.

How seriously should we take Mr Rees-Mogg's hardliners? The seem to command a group of about 50 Conservative MPs, with 4 sympathisers in the Labour Party and many among the DUP. This is enough to cause trouble, and plenty enough to neutralise the government's majority. But it is not enough to unseat Mrs May from the top job. They should be capable of being outmanoeuvred. And yet they are very effective campaigners. Their message that the Chequers deal is a betrayal of what people voted for in June 2016 is gaining traction amongst people that voted Leave. Once again an emotive message only loosely aligned to the facts is trumping (or Trumping?) a dryer, more intellectual argument that in fact most Leave supporters were not very clear on what it was that they wanted, and that a compromise is what a badly split nation seeks, and that besides, a sovereign parliament can always unpick it after the country is fully out in 2021. If I'm right about this then that's big trouble. Mr Rees-Mogg's 50 MPs can become a much more dangerous 150 or more. And they will be holding the Conservative Party itself hostage. Many draw a parallel with the Corn Law crisis of the 1840s, when the Tory Prime Minister Robert Peel pushed through a liberalisation of trade laws, destroying his party for a generation. Ireland featured in that debate too (the Irish Famine was exacerbated by the Corn Laws - to the total indifference of most Tories). Does Mrs May Peel's steel? Can she do a deal with opposition MPs, as Peel did? Few people think so, but she can surprise.

What makes things so hard to predict is an ideological recklessness about Mr Rees-Mogg and his supporters. They have no time for practical obstacles. They pat away all the various knotty problems with simple solutions based on fantasy (even if the other side often exaggerates the dangers) - or a dream, to use Mr Johnson's word. Mr Rees-Mogg is a fund manager, and it shows. Fund managers (a breed that I used to work with) pride themselves on vision and moving quickly. The practicalities are for the little people. That works well enough for buying and selling shares, most of the time (though I often used to have to clear up the mess when things went awry in the days before modern technology - needless to say this was neither their fault or else they'd say sorry very nicely).

They are insouciant on one issue in particular: the prospect of reaching the leaving date without an agreement with the EU - the so-called no-deal Brexit. "No deal is better than a bad deal," was a common mantra two years ago, and was used by Mrs May herself. The idea is that doing a deal with the EU was like a property transaction, where it doesn't do to look too desperate, and you should show your preparedness to walk away. But for Brexit a no-deal works two ways: it's bad for both sides. The EU is now using this tactic too, and when you look at it, they have the upper hand in any no-deal situation. In order for Britons to go about their ordinary business of importing and exporting, or even going on holiday, they would have few automatic rights. That works the other way too, of course, but the relative impact on Britain would be much higher. When interviewed about a no-deal, hard Brexiteers talk about what the impact might be after any new arrangements (under WTO terms, they say) had bedded in a few years' time, and not the scale of any short-term disruption.

The insouciance extends to Ireland as well. "We won't put up any border posts," they say, "if the Irish government does, then they will be to blame." Blaming somebody else is the thing, rather than solving difficult problems. In fact, as one commentator I read recently has suggested, the core Tory Brexiteers are probably closet English nationalists. They wouldn't be that stressed if Northern Ireland (or Scotland for that matter) drifted off. Actually I wouldn't worry about the former drifting off either, if it wasn't the prospect of communal violence sparked by working class Loyalist communities which could trip over into civil war.

And might Brexit itself fail amid this chaos? Could a parliamentary impasse lead to a fresh referendum with perhaps three choices - no deal, compromise deal or not leaving at all? Some people suspect or hope (depending on viewpoint) that this is the secret agenda of the EU side. But nobody, anywhere, is making any serious preparations for a Remain option. Trying to get it onto a ballot paper at such short notice will be hard.

My guess remains that Mrs May is able to do a Peel in the end, gathering support from enough Labour MPs to win through the parliamentary votes, and that the EU will blink when it comes to some of their red lines. But that will make for a tense endgame.